Correlation Between Perseus Mining and National Health
Can any of the company-specific risk be diversified away by investing in both Perseus Mining and National Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Perseus Mining and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perseus Mining Limited and National Health Investors, you can compare the effects of market volatilities on Perseus Mining and National Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Perseus Mining with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perseus Mining and National Health.
Diversification Opportunities for Perseus Mining and National Health
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Perseus and National is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Perseus Mining Limited and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and Perseus Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Perseus Mining Limited are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Perseus Mining i.e., Perseus Mining and National Health go up and down completely randomly.
Pair Corralation between Perseus Mining and National Health
Assuming the 90 days horizon Perseus Mining Limited is expected to under-perform the National Health. But the stock apears to be less risky and, when comparing its historical volatility, Perseus Mining Limited is 1.19 times less risky than National Health. The stock trades about -0.08 of its potential returns per unit of risk. The National Health Investors is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,850 in National Health Investors on September 4, 2024 and sell it today you would earn a total of 400.00 from holding National Health Investors or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perseus Mining Limited vs. National Health Investors
Performance |
| Timeline |
| Perseus Mining |
| National Health Investors |
Perseus Mining and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perseus Mining and National Health
The main advantage of trading using opposite Perseus Mining and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perseus Mining position performs unexpectedly, National Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in National Health will offset losses from the drop in National Health's long position.| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Barrick Gold | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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